Syntagma Digital
Editor, John Evans
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Saturday Ramble: Conservatives dream of Silicon Alley

As a self-appointed member of that exotic species named “internet entrepreneurs”, I was interested in Fraser Nelson’s article in the current issue of The Spectator.

Silicon Valley

The summary of the piece states: “… the Conservatives are taking their cue from the West Coast of America: the land of Google, Stanford University and venture capital. They want to rebuild Britain in California’s image: dynamic, high-tech, green and ‘family-friendly’.”

That is a good idea … up to a point.

California has its exhilarating high points for sure. It also embraces deep pits of madness. As a melting-pot State with many right-on East Coast emigres, plus millions of Hispanics up from the South, mostly illegal, it lacks the sense of cohesion Britain once had, and still does in some parts of the country.

California has an annual income roughly the same as the UK’s. Recently it was said to be overtaking Britain and would soon be the world’s fourth largest economy, taken by itself. We won’t know if that’s really true until the dust settles from the current depression.

On this side of the duck pond, we tend to see only two aspects of the State: Silicon Valley and Hollywood. Both conjure up images of starlets on roller skates, propelling themselves along wide pavements against a background of endless sun, sea and sand to the sound of the ululating Beach Boys.

We blank out the forest fires, the frequent earthquakes, the smogs, boot to bumper car jams, crime, and the cute chaos of the place. It’s a young person’s environment, maddeningly obtuse about lots of things, always eager to jump on any passing whimsy that offers a new thrill.

Incubator of the future, yes, but also progenitor of a million tried and rejected poppycock schemes. The Brits who wash up there are usually attention seekers, like actors, singers and graduates of Performing Arts schools.

California is also hard work. Michael Arrington, who built up TechCrunch from nothing, has had a series of health problems from overwork, including exhaustion, nervous and heart complaints. He recently received serious death threats and was spat on in a public place, requiring a month off work.

TechCrunch.com is a blog-based content network that evaluates startup enterprises and their products. It’s no place for the fainthearted apparently.

Duncan Riley, who originated The Blog Herald from a quiet corner of Western Australia, graduated to TechCrunch and spent some time in the Valley. His observations on the crazy greed of the place, its supercharged way of life and general attrition against human health and sanity, contributed to my own decision not to move there at the height of the boom.

And yet the lessons of the Valley and of the Californian and Seattle-based tech scenes can be learnt and imported by a new Tory administration.

Britain needs to manufacture more, especially high tech equipment and derivatives. Silicon Valley specializes largely in internet-based software and services, but it doesn’t make the hardware. The metal and plastic bits are cheaper to produce and assemble in the Far East, and that will remain so in the future.

The operating software, which the Valley does so well, is deferred design and therefore part of the manufacturing process. No-one will buy a generalist box of tricks with no room for applications.

There is also a third level in the making of computer technology, that of application writing — the creative bit. The operating software contains a series of APIs (application programming interfaces) which allow outside creators (programmers) to add products and services to the basic design.

Increasingly, these services are being dangled from “the cloud”, a magical place in cyberspace where software applications and APIs reside for public use. Software on hard drives is going rapidly out of fashion at the punchy end of the market.

The British happen to be very good at these secondary and tertiary levels of the manufacturing process. One thing holds them back.

The national curriculum and the educational establishment relentlessly discriminate against “abstract thinking”, the basic skill for succeeding in these areas. Universities are encouraged to subvert their course lists in favour of cottonwool subjects like media studies and sports management.

In Britain, you can select students for State schooling only in areas of music, sport, and other physical and dexterity arts. You can’t select for mathematics or disciplines which require abstract thinking, like philosophy, theoretical physics or logic.

Stupidly and destructively, the Labour party has created all manner of taboos against it, raising any proposer of academic selection almost to criminal status. So far, the Conservatives have gone along with this for a quiet life. They fear the demonizing power of the left, which is far nastier than they are.

That amounts to national suicide, especially for a country that was, within living memory, responsible for 55 percent of the world’s primary inventions and discoveries.

If George Osborne wants to mimic West Coast Silicon Valley or Seattle, let him sort out that problem first. Britain needs to train its own software engineers, not import them from India and the Far East.

Globalization will take a long time to recover from its recent catastrophic fall from grace. We need to look carefully at ourselves and incubate the future here at home. Empire building abroad can wait … for now.

John Evans

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Second Life? What about a first life?

Massed Stingrays The disturbing story of the very young Australian boy feeding small zoo animals to larger ones, raises all kinds of questions and parallels.

In the past year more than 20 teenagers have hanged themselves in the area around the small borough of Bridgend in South Wales, UK. Why they did it remains unanswered and is baffling parents, police, experts and the authorities.

In America the phenomenon of high school kids shooting up their campuses, then turning the guns on themselves, probably comes from the same root cause.

The police say they were not all members of any web-based suicide cult, although a few of them may have used the chatrooms. They didn’t all know each other either, and didn’t constitute a group or gang. So what is happening here?

Bridgend is a rather nice area, surrounded by glorious countryside, including the Vale of Ogmore and Merthyr Mawr, a wild place of sand dunes and beaches. It’s also near to the upmarket Vale of Glamorgan, a wealthy patch of rolling, green hills and country pubs. There are many worse places to live.

They did all have one thing in common though. Like all modern teenagers they were immersed in social networking sites — Facebook, MySpace, Bebo, and some with the virtual world of Second Life.

Their inner space was formed by the anarchistic conversations of mainly unknown “friends” made on these addictive sites. No settled discourse this, but a 24/7 babble of wildly differing opinions, rants and life objectives, generously sprinkled with bizarre fantasies incapable of fulfilment in the real world.

And there’s the crunch — “the real world”. It really is a second life on these sites, bearing little resemblance to the day to day concerns of older people. That, of course, is their attraction.

The sites’ main competitor is “the real world”, that space of dismal state schooling; urgent demands on climate change of which we are ingenuously presented as the main cause; the breakdown of our ethical system and its replacement with social Marxism (political correctness and obsessive equality) and the bureaucratic autism of the governing class.

The world they look out on is one of cynical politicians on the make, advertisements that make them crave objects they know they don’t really need, and an adult generation that has allowed chaos to reign. The idealism of youth is quickly spent.

Add to all that, mass immigration and the introduction of cruel medieval practices, gang culture, knife crime and drug-based gun law, and the Britain they live in no longer has the moral or physical authority to demand their loyalty.

Teenagers today like nothing better than to “get wrecked” — hopelessly drunk — most nights of the week. Without boundaries to make sense of their lives, or any compelling lodestar to guide them, modern youth sinks into the apparent benign world of social networking.

The outer world gives them nothing but information-overload characterized by countless pressure groups competing for their attention with contradictory messages and injunctions. Good parents get drowned out, as do decent teachers.

Even the government is now just one voice among many, chopping and changing its empty slogans on a daily basis. Thought anarchy rules the lives of young people, an unpleasant environment for mental development to take place.

So, social networking they go. The problem is, it has a very thin actuality. Quickly they discover it hasn’t the substance to satisfy their need for experience and the challenges that promote growth of character and individuality. They are trapped in a no-man’s land between a wafer-thin second life and an unbearable jungle of squabbling claim and counter-claim in the world itself. No wonder many are taking their own lives.

Social networks can be dangerous places to be if you are immature and seeking experiences that should come from life itself.

John Evans

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Syntagma Media is three

Birthday Cake What a day to have a birthday. With the world and its future darkening visibly around us, and crunch turning to munch, we’re all seemingly heading for lunch on a plate, not seated at the table.

However, amidst all that financial chaos there is some good news: Syntagma is three years old.

Three is a significant number in horse, dog and internet years. Horses get to run in the Derby, dogs are the equivalent of 21, and anything on the internet is a virtual centenarian.

When we started out 36 long months ago, this site was a pure technology and media play. It was also the cheerleader for the launch of new sites on a large sprinkling of topics. Now I write here only about politics, finance and technology, in that order of magnitude. You won’t need to ask why, discerning Reader.

Many of the old staff have moved on — those who remain have aged visibly, some even look like centenarians.

Enough of the past, it is another country as someone once said — The Shire, perhaps. If the future looks more like the Land of Mordor, I fancy we’ll glean something of value and interest from it, and certainly something to write about — whatever horrors it throws at us.

So what’s the prognosis for Syntagma’s fourth year of operations, bearing in mind it is a business as well as an online publication?

In the wider world, freight shipping is slowing at the same rate it did at the end of 1931. There are so many similarities popping up between now and the 1930s, it’s beginning to take on a distinct Tolkien shade of dark mist and distant pointy mountains.

Even Russia, with it’s massive half-trillion of cash reserves, is sliding into a downward spiral towards another bankruptcy and authoritarianism.

We ourselves on this sceptred Isle will not be spared a decade of pitiful growth, or none, as we purge the vast vaults of debt accumulated under the deceptively-stern gaze of Prudence in recent years.

As Ambrose Evans-Pritchard puts it in today’s Telegraph, “The world stole prosperity from the future for year after year, with the full collusion of governments, regulators, and central banks. Now the future has arrived.”

Well, we are still here. And we will prevail until we come out the other side like foot soldiers returning from the trenches. In internet age, I calculate we’ll be around 300.

Something to celebrate, surely?

P.S. As a contrast with today, here’s Syntagma’s first birthday piece. Read here.

John Evans

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Silicon Valley and the credit crunch

Doubt and Fear So far during this Crisis we’ve been discussing the crashing of big banks and financial institutions.

Today, the collapse of flatpack furniture giant MFI in the UK illustrates that the rot has set in on Main Street too. This has a long way to go yet.

But what about startups? These are small businesses with embryo staffing arrangements, usually depending on borrowed, credit card or venture capital funds to pay the bills.

Web 2.0 star and now a venture capitalist himself, Jason Calacanis, writing in Jason’s List — an email list for bright business folk — believes that up to 80 percent of them are on the point of going bust:

It’s my believe that the economic downturn will be much worse than it is today, and that 50-80 percent of the venture-backed startups currently operating will shut down or go on life-support (i.e. 3-4 folks working on them) within the next 18 months. Make a list of every Web 2.0 startup to raise an A or B round and cross 80 percent of them off the list, because they will not make it to their next round of funding or profitability.

I know many such startups personally, particularly tech and internet businesses, and this assessment is devastating. It’s also nothing but the truth in all its stark outline.

Around six months ago, we predicted here that another dotcom bust could not be ruled out. It can’t, but there’s always hope before it happens that some features peculiar to tech startups will not be in the direct path of the storm.

The first thing to note is that the internet is a much maturer place to do business now. Many more people depend on it than back then. It’s also stuffed full of very big players indeed, companies that will ride out the crash on a large cushion of cash — Microsoft and Google, for example.

It’s the overextended startups that will splutter to a halt, fall into mothball mode, or their owners will simply walk away and do something else.

The dotcom collapse earlier in the decade had the effect of destroying the paradigm it was built on: that internet businesses didn’t need to make any money at all, just puff themselves up for an IPO on the stock market which would make the founders very rich.

It was a classic bubble that burst with an inevitability that took believers by surprise, but never fooled more experienced observers.

The problem was that entry costs, even then, were very low compared with similar bricks-and-mortar operations. The potential was obvious, but people simply went mad with the hubris of it all.

The current bursting bubble in house prices — one of the biggest asset classes out there — is apparently similar but much more infectious in that it penetrates to the very core of the financial system and affects everyone, not just a few thousand geeks who thought they had reinvented the world.

If you were involved with the online world at the start of the century you’ll know how it felt to go under with a bang. It must feel eerily similar now.

Small-to-medium businesses with no debt, some cash reserves and crucially no need for further rounds of funding — like Syntagma Media — will survive, if they play their cards right. The danger is that their server companies won’t and they find themselves suddenly cut off.

This Crisis will affect everyone in different ways. It would be a prudent move to assess any business’s configuration to determine its weak points. That could save their skin.

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More blog networks fail as economy stalls

Running with the ball Another week, another blog network wraps itself up. This time it’s the business network, Know More Media, which was particularly hard hit by Google’s ranking penalties.

Like BlogNation, a UK-based outfit, they simply ran out of money. I can think of many others that suffered the same fate, but will spare you the litany.

Even the few networks that professionalized themselves by raising VC funding and bringing in experienced managers, are finding the going tough right now. Earlier predictions of another dotcom bust are not off the table yet.

I’ve written many pieces here over the past three years on the choices faced by network owners and the chances of success. Most warned of this present crisis. As a result, Syntagma was ahead of the pack in diversifying into specialist information products on subscription terms. We have not yet felt the full force of the U.S. recession-in-progress.

The coming steep downturn in the UK will have minimum effect on us, except if the pound sterling falls relative to the dollar, in which case we will see our income rise on a windfall.

In America, the startup industry is losing momentum fast, although there’s no shortage of brave souls willing to chance more than their arms.

So, what’s to be done if you have invested heavily in an internet business, whether content or blogging-based or not?

The answer is to spot the second bounce of the ball.

As the economies eventually begin to turn around and a slow recovery takes place, most people will be looking out for “little green shoots” to signify a return to economic growth. In the early 1990s those shoots were a long time coming, and when they did, they grew slowly like hardwood trees, not the swift pines we were hoping for. I suspect the little shoots will keep us waiting even longer this time.

Green shoots may be interesting, but watching for the second bounce of the ball is usually more profitable. If the first bounce online for many of us was mass publishing technologies, what could the second be?

Providing content on your own platform as both writer and publisher makes sense because it cuts costs. Hiring other writers to do it for you made sense three years ago, but with advertisers shunning small-to-medium operations it’s probably easier to flip burgers.

Now we need a second bounce to reflate the whole business of working successfully online.

Forget social media. Maggie Jackson’s book Distracted: The Erosion Of Attention And The Coming Dark Age highlights the price we pay — including actual brain damage — for standard multi-tasking and trying to keep abreast of the information space.

As in my own book on the subject, Mediate Yourself, this is now becoming a common theme whose time is about to come. Finding ways not just of sifting and processing information but relating it to people’s essential requirements is a major path forward. Limiting individuals’ needs to interact with screens is probably more relevant still.

Simplifying the lives of knowledge workers is the big leap forward that will take us to the next level.

So far technology and software have complicated human life immeasurably. The constant pressure to upgrade and learn new tricks is mind-mashingly painful for most people — hence the brain damage.

The truth is, there may be no single second bounce this time, but a series of mini-bounces, with no one golden goose presenting itself for carving.

At Syntagma, we have our eyes on a variety of possibilities. To use a rugby term, all it needs is for someone to pick up a ball and run with it. As I write, there are not many runners out there.

Oh well, I’ll just have to do it myself, I suppose.

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